E-commerce includes the sale and licensing of digital goods through online marketplaces provided over private and publicly available networks, such as the Internet. Some classes of digital goods, such as music, videos, and other forms of entertainment content; news and information; and various types of electronically-stored data, can be sold in unrestricted quantities without incurring changing marginal costs. Other classes of digital goods, such as software or services, generally entail changing supply or other marginal costs due to support or related post-sale needs. Moreover, different types of digital goods can have different supply or marginal costs and, as a result, each unique digital good must be priced separately as a function of those costs and customer demand.
Purchasing, when performed online, requires a secure electronic interchange between e-commerce customer and vendor, either directly or through an intermediary. E-commerce customers expect a reasonable level of security when providing authorization to debit their bank accounts or to access other forms of electronic payment. Additionally, customers are becoming increasingly concerned about their personal privacy. The nature of the goods, for instance, might be personal or sensitive, or the customers might be averse to the collection of personal data or shopping histories, particularly when such information might be provided to third parties. E-commerce vendors rely on trusted infrastructures to both ensure that the customers have funds available to make online purchases and that those funds are reliably received following each purchase.
Pragmatically, online vendors must also ensure that they both earn revenue and meet constraints on the costs of supplying digital goods. Demand-driven pricing allows online vendors to make price changes when necessary. Generally, online vendors seek to maximize revenue for goods with fixed costs, but need to adjust prices for goods with variable supply or marginal costs.
Conventional non-private online marketplaces work well with fixed cost digital goods by allowing prices to freely fluctuate with demand. Prices can rise when demand is high, and fall when demand is low. Such demand-driven price fluctuations occur independently of the vendor and, hopefully, the pricing eventually approaches an optimal level, given costs and demand. Non-private online marketplaces, however, afford no privacy to customers, whose personal data, such as demographics, shopping habits, and preferences, and shopping histories are exposed for potential unauthorized collection and exploitation.
In contrast, conventional private online marketplaces protect customer privacy, but neglect vendor needs. One approach that conceals the types of goods purchased is described in W. Aiello et al., “Priced Oblivious Transfer: How to Sell Digital Goods,” Ad. in Crypt.—Eurocrypt '01 (2001), the disclosure of which is incorporated by reference. Aiello discloses that vendors can store encrypted prices to enable customers to privately transact purchases. However, vendors are unable to track and adjust the price of goods in response to customer demand.
Finally, conventional anonymous online shopping introduces a surrogate agent to transact purchases on behalf of each customer under a pseudonym. However, the pseudonyms can be reused, either out of convenience or expediency, which enables vendors to discover customers' shopping histories. Further shortcomings of anonymous online shopping are described in R. Clayton et al., “Real World Patterns Of Failure in Anonymity Systems,” Proc. of Info. Hiding 2001 (2001), the disclosure of which is incorporated by reference.
Therefore, a need exists for providing private online purchasing that dynamically drives pricing towards a revenue maximizing point for fixed cost digital goods, while allowing customers to buy the goods privately, that is, without the vendor learning which digital good was purchased.
A further need exists for providing private online purchasing that dynamically drives prices for variable-cost digital goods to a point that corresponds to a target supply or marginal cost level.